On May 10, 2010, we the people of the United States of America were notified pursuant to Securities and Exchange Commission Release No. 33-9123,(the "Notice") that the:
Chairmen of the Securities and Exchange Commission and the Commodities Futures Trading Commission, with the concurrence of the other SEC and CFTC Commissioners, respectively, intend to establish the Joint CFTC-SEC Advisory Committee on Emerging Regulatory Issues (the "Committee").
We've got this huge regulatory problem on Wall Street. Thankfully, SEC Chairman Mary Schapiro and CFTC Chairman Gary Gensler, the industry's leading regulatory cops, will aggressively confront those problems by intending to establish a joint advisory committee with the concurrence of their organizations' commissioners. I was sort of worried that all those folks wouldn't concur about creating yet another committee but my fears were misplaced. Lemme sit down here for a spell before I pass out with excitement. Okay, that's better, I feel the blood rushing back into my head. Wow! What a brilliant, dramatic, and edgy response to our financial crisis.
Hitting the Ground Running?
Of course, setting up the Joint CFTC-SEC Advisory Committee on Emerging Regulatory Issues is no simple task. There are official rules and regulations about such things. For example, consider what the Notice says:
In accordance with the requirements of the Federal Advisory Committee Act, 5 U.S.C. App. 2, the Agencies are publishing this notice that the Chairmen of the SEC and CFTC, with the concurrence of the other SEC and CFTC Commissioners, intend to establish the Committee. The Committee's objectives and scope of activities are to conduct public meetings, submit reports and recommendations to the CFTC and the SEC and otherwise to serve as a vehicle for discussion and communication on regulatory issues of mutual concern and their effect on the CFTC's and SEC's statutory responsibilities. Subjects to be addressed by the Committee will include, but will not be limited to, identification of emerging regulatory risks, assessment and quantification of the impact of such risks and their implications for investors and market participants, and to further the Agencies' efforts on regulatory harmonization. The committee will work to develop clear and specific goals toward identifying and addressing emerging regulatory risks, protecting investors and customers, and furthering regulatory harmonization, and to recommend processes and procedures for achieving and reporting on those goals.
This joint advisory committee will not be wasting their time or our taxes. Not at all. Quite to the contrary. From day one, they are going to start identifying risks and assessing and quantifying the impact of those risks. Once the committee members have completed those tasks, they will work to develop clear and specific goals and to further regulatory harmonization. I'm glad that this committee was created with the plan that it should have clear and specific goals. Can you imagine the alternative? Unclear and vague goals. Of course, I'm not quite sure why anyone would still be uncertain as to what those goals should be -- you know, some three-plus years into this financial crisis -- but, hey, that's just me. Moreover, how lovely that the often warring factions in our government have finally agreed upon harmonization of something. Perhaps they could get a classically trained musician to join the committee and help keep them all in tune?
Meeting, Submitting, and Vehicleing
Did you note that this advisory committee's objectives and scope of activities are to conduct public meetings, submit reports and recommendations, and otherwise serve as a vehicle for discussion and communication on regulatory issues? Geez, that's pretty ambitious. I hope that they haven't bitten off more than they can chew.
The first objective and scope of activities of this joint SEC/CFTC advisory committee is to conduct public meetings. I thought that we had enough government folks conducting public meetings these days, but, then again, I'm just some poor shlub and no one asked for my concurrence about nuthin' to do with this advisory committee thing. The good thing is that if they televise these public meetings, then CNBC, Fox Business, and Bloomberg will all have additional free programming. I know that I am going to record each and every one of those likely riveting media events. Of course, I will have to cancel my daily taping of the Weather Channel.
A second objective/scope of this Advisory Committee is to submit reports. Talk about thinking outside the box! That's a very edgy concept in this day and age - to submit reports. Don't laugh. Perhaps you fail to realize all that is entailed in submitting reports? Someone is going to have to draft the reports and then someone else will have to edit the reports and then someone else will have to review the reports and then someone else will have to look the reports over and then maybe, just maybe, a vote of some type will be taken to authorize the official submission of each report, which will then either be disregarded by the White House or never passed into law by Congress.
Finally, the third and final objective/scope of the Advisory Committee will be to serve as a vehicle for discussion and communication. A vehicle? Does that mean that the committee will have to buy an automobile? If the committee does buy an automobile, I'm hoping that they will buy American because we just bailed out Detroit and, you know, the taxpayers might realize some benefit if the committee members are driving around town in a GM or Ford while discussin' and communicatin' about the regulatory stuff. It would be nice if someone could drive Ms. Schapiro and Mr. Gensler to and from the meetings.
I'm Thinking of a Number Between 10 and 15
In order to achieve the committee's goals, the Chairmen of the SEC and CFTC will appoint approximately 10 to 15 members. Can Mary Schapiro be a Chairman? Assuming that Gary Gensler doesn't want to be a Chairwoman, maybe they should just be called Chairs? I never understood why Ms. Schapiro calls herself a Chairman rather than a Chair, but, perhaps I digress?
Okay, so where was I? Oh yeah, I was digressing -- anyway, the two Chairmen aren't going to be all alone on this advisory committee. Ms. Schapiro of the SEC and Mr. Gensler of the CFTC are going to pick a dozen or so other folks to populate the committee. Why do we need the two Chairmen on the same advisory committee to begin with? Well, ya gotta have at least two chairpersons. It's how things are done. Wake up and smell the coffee - this is Washington, D.C. and you gotta have titles, lots of them, and useless ones too!
Speaking of useless titles, obviously you can't just have 15 appointed Advisory Committeepersons with only two illustrious Chairmen on that same body. Like I said, if you intend to be taken seriously in Washington, you have to have titles, lots of titles. Gravitas, man, gravitas. As such, here's how the Notice addresses the honorifics:
There will be two co-designated federal officers of the committee. The Chairman of the CFTC will appoint a CFTC employee to serve as one co-designated federal officer of the committee and the Chairman of the SEC will appoint an SEC employee to serve as the other co-designated federal officer of the committee. The co-designated federal officers jointly call all of the advisory committee's and subcommittees' meetings, prepare and jointly approve all meeting agendas, adjourn any meeting when they jointly determine adjournment to be in the public interest, and chair meetings when directed to do so. The co-designated federal officers also will attend all committee and subcommittee meetings. The Chairmen of the CFTC and of the SEC shall serve as Co-Chairmen of the Committee. The Committee's membership will be fairly balanced in terms of points of view represented and the functions to be performed.
Get yer scorecard! Get yer scorecard!! Can't tell the Advisory Committee members and officers without one!!!
You may laugh, but these two co-designated federal officers of the committee (CDFOOTC's) have an important job to do. Yes sir! The two CDFOOTC's call the meetings, prepare the agendas, and adjourn the meetings. Although such demands might tax the strength of mere citizens such as you and me, amazingly, the Notice assures us that the two CDFOOTC's will "attend all committee and subcommittee meetings." I'm not sure how they will have time to attend the meetings, what with all their meeting calling, agenda preparing, and meeting adjourning duties, but, hopefully, we will select two very adept CDFOOTC's. By the way, I'm pronouncing that as "See - Dee - Footsies."
The Charter
Moving along here, besides fancy-schmanzy titles we also need to make things sound more important than they are. A quick way to accomplish that public relations goal is to require the drafting of a charter. What's a charter? I'm not sure, but I think they go for $4.75 at Staples (a convenient ten-pak for $39) --I could be wrong about that, so I'll get a catalog and look it up later. Anyway, according to the Notice, the
Committee's charter will be filed with the Senate Committee on Agriculture, Nutrition and Forestry; the House of Representatives Committee on Agriculture; the Senate Committee on Banking, Housing, and Urban Affairs; the House Committee on Financial Services, and U.S. General Services Administration Committee Management Secretariat ("Secretariat"). A copy of the charter also will be filed with the SEC, CFTC and the Library of Congress. The charter will be available for Web site viewing and printing in the Public Reference Room at the SEC's headquarters and posted on the SEC's Web site at www.sec.gov and the CFTC's Web site at www.cftc.gov.
There are going to be lots of copies of this nutritious, agricultural charter thing all over the place - with senators and representatives and something that they call the U.S. General Services Administration Committee Management Secretariat. I remember Secretariat. That was one hell of an amazing racehorse. You see how many lengths he won the Belmont by? Is that thoroughbred now working for the U.S. government? I thought Secretariat was dead. Oh well, what the hell do I know? If Secretariat is on the advisory committee, I think he is too large to be driven around in the vehicle for discussion. On the other hand, if he is a stand-up kind of guy, maybe he will give Ms. Schapiro and Mr. Gensler a ride on his back.
It's nice to know that the advisory committee will investigate all that is wrong with Wall Street. Just the other day, the Dow Jones Industrial Average dropped 1,000 points and they cancelled thousands of trades. What a mess. And here we are, days later, and no one seems to know why it happened and no one seemed to know how to deal with it at the time. Personally, I would never have had the genius to come up with the brilliant idea of fixing those problems by chartering yet another joint advisory committee run by two CDFOOTCs and staffed with 15 folks conducting public meetings. Small wonder that I'm not an elected representative or a government regulator. My vision is far too myopic.
Two Years? Two Years!!
I'm probably too impatient to serve on these committees. I likely would disrupt the whole harmonization thing. For example, this language in the Notice drives me crazy:
The Committee will operate for two years from the date it is established unless, before the expiration of that time period, its charter is re-established or renewed in accordance with the Federal Advisory Committee Act or unless either the Chairman of the SEC or the Chairman of the CFTC determines that the Committee's continuance is no longer in the public interest.
The Committee will meet at such intervals as are necessary to carry out its functions. It is estimated that the meetings will occur six times per year. Meetings of subgroups or subcommittees of the full Committee may occur more frequently.
Two years of operatin' and meetin' and vehiclein' and submitin'? Thankfully they are estimating at least six meetings per year. You can really get your arms around all of Wall Street's emerging regulatory issues at six meetings a year -- can't you? Oh, you're right, the Notice does provide for something called a subgroup or subcommittee to meet more frequently. Subgroup? Subcommittee?? I'm guessing that in addition to driving around town in a GM or Ford that some of these committee members will be meeting underwater in submarines. Do you think that they will have permission to fire a torpedo?
Comments
Finally, just in case you read the Notice and want to send your two cents in, here's how that goes. You didn't think that you could just send in a comment to such an august advisory committee, did you? Are you kiddin' me? There are policies and procedures. Make a note of these:
COMMENTS:
Because the Agencies will jointly review all comments submitted, interested parties may send comments to either Agency and need not submit responses to both Agencies. Respondents are encouraged to use the title "Joint CFTC-SEC Advisory Committee" to facilitate the organization and distribution of comments between the Agencies. Interested parties are invited to submit responses to:
Securities and Exchange Commission: Written comments may be submitted by the following methods:
Electronic Comments• Use the SEC's Internet submission form (http://www.sec.gov/rules/other.shtml); or
• Send an email to rule-comments@sec.gov.
Please include File No. 265-26 on the subject line.Paper Comments
•Send paper comments in triplicate to Elizabeth M. Murphy, Secretary, Securities and Exchange Commission, 100 F St., NE, Washington 20549. All submissions should refer to File No. 265-26.To help the SEC process and review your comments more efficiently, please use only one method. The SEC staff will post all comments on the SEC's Internet Web site (http://www.sec.gov/rules/other.shtml).
Comments will also be available for Web site viewing and printing in the SEC's Public Reference Room, 100 F St., NE, Washington DC 20549, on official business days between the hours of 10:00 a.m. and 3:00 p.m. All comments received will be posted without change; we do not edit personal identifying information from your submissions. You should submit only information that you wish to make available publicly.
Commodity Futures Trading Commission: Written comments may be mailed to the Commodity Futures Trading Commission, Three Lafayette Centre, 1155 21st Street, N.W., Washington, DC 20581, attention Office of the Secretary; transmitted by facsimile to the CFTC at (202) 418-5521; or transmitted electronically to Jointcommittee@cftc.gov. Reference should be made to "Joint CFTC-SEC Advisory Committee."
FOR FURTHER INFORMATION CONTACT: Ronesha Butler, Special Counsel, at 202) 551-5629, Division of Trading and Markets, or Elizabeth M. Murphy, Committee Management Officer, at (202) 551-5400, Securities and Exchange Commission, 100 F St., NE, Washington DC 20549, or Martin White, Committee Management Officer, at (202) 418-5129, Commodity Futures Trading Commission, Three Lafayette Centre, 1155 21st Street, N.W., Washington, DC 20581.
Bill Singer's Comment: If I were a cynical man, and I'm not, well not much of a cynical man, well, okay, I am a cynical man - okay, let's start over, as a cynical man I can't help but laugh at this nonsense. This is how we fail to address serious problems in the 21st Century in the USA.
We issue overblown, laughable Public Notices about endless committees, advisory committees, subcommittees, and subgroups. We spend more time ensuring that everyone gets a title and a medal. We conjure up high fallutin' explanations for simple tasks, which result in such tortured concepts as creating vehicles for discussion and communication on regulatory issues.
Even more maddening, there is no sense of urgency. Two years for this task? Two years to hold meetings and issue a worthless report? Let's call it as it is: It's just about giving the public a show, nothing else.
As I said once before: We have become a nation that ponders everything and resolves nothing. What more proof do you want than this Notice?